Why You Should Not Outsource Your Hotel's Accounting | By David Lund - Hospitality Net - 0 views
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Outsourcing your hotel accounting is an unintelligent move
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One good thing that comes from outsourcing is being trendy. Many brands are doing it and it is the trendy thing to do.
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Another very negative result of outsourcing the accounting function is brain drain and the resulting challenge it creates in succession planning.
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On the positive side, another idea about outsourcing accounting is the creation of a different kind of finance and accounting leader;
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If you are thinking of outsourcing your accounting, think again. It is not a good decision. It will cost you dearly and your investment will suffer.
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Companies feel compelled to move, to innovate, and sometimes these changes are not in their best interest
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When a hotel outsources they typically outsource payables, some parts of purchasing, general accounting, sometimes accounts receivable and almost always the daily audit and revenue functions.
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Hotels are a high-volume transaction retail business. Every day a hotel sells hundreds or thousands of rooms to many different customer segments. In addition, it services thousands of food and beverage customers.
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These functions in a hotel are like filters, collecting all the errors and working with operations to get them back on track
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The hotel loses track of so many invoices so they start logging the scans and cross referencing these with the outsourced company.
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If there are no entry level positions, no revenue auditor and no middle management, then how does a hotel grow controllers and directors of finance?
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they are not going to have financial leaders that understand the hotel business and all its insane nuances.
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This in theory is exactly what I think hotels should be doing – developing the business skills of the non-financial managers.
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Colleagues in the operating departments need constant oversight and this boils down to finding out what is wrong with the data and communicating back to these areas.
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This article provides an overview of the importance for hotels to have a centralized function and not outsourcing the hotel accounting, meaning that hotels should not use a third party provider. Companies are compelled to change, to innovate, and in need to keep up with the competition. It says that some hoteliers are choosing to outsource because is trendy, but not always function in their best interest. This article emphasizes the pros and cons, but mostly all the negative results of outsourcing, using other companies to do the work that should be centralized.
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The article titled "Why You Should Not Outsource your Hotel's Accounting" sheds light on the importance of having a solid financial and accounting program within the hotel industry. The author misadvises outsourcing the hotel's accounting through a third party provider since it is important for the company to have complete control of the accounting. Although outsourcing is a big trend nowadays, including outsourcing for IT and reservations among other systems, the author firmly believes that accounting should be a task that is monitored in house. According to the article, "A negative aspect of outsourcing is the reduced level of service. Good service in a hotel is everything, not only for external guests, but also for internal guests. In a full-service hotel, the accounting department provides a long list of services: receivables, payables, payroll, revenue control, cash management, systems oversight, audit, food and beverage controls, purchasing, receiving, general accounting and budget/forecasting to name but a few". As hotels require superior service and a wide array of reports to be generated in real time, it is better to hire and train someone with this capability in house rather than calling a company that has other clients. Thus, outsourcing the accounting aspect is quite costly and it is not recommended, as it is a task that needs to be constantly analyzed and controlled in house.
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This article examines the pros and cons associated with outsourcing hotel Accounting practices to a third-party company. The author mentions that hotel operators are under immense pressure to constantly innovate, keep up with and stay ahead of industry trends. However, by following these trends they may not be aligned with the hotel's best interest, resulting in a reduction in efficiency and increase in costs. When choosing to keep accounting practices in house, hotels are better able to capture errors and work with the different departments to correct the errors before recording them in the books.
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https://www.hospitalitynet.org/opinion/4083889.html My article highlights the cons of outsourcing a hotel's accounting system from a third party provider. The author mentions that in the hotel industry, technology is constantly changing and every hotel is trying to stay on trend and "keep up with Jones'". The main issue with outsourcing is the reduced level of service. "In a full-service hotel, the accounting department provides a long list of services: receivables, payables, payroll, revenue control, cash management, systems oversight, audit, food and beverage controls, purchasing, receiving, general accounting and budget/forecasting to name but a few." When you outsource, there is reduced attention to these details. If a hotel's own accounting department handles these daily operation segments, there is less likelihood for error and they will be able to work with the various departments to correct the issues. It also saves tons of money to handle accounting in-house. Another important issue that was raised is that if accounting is outsourced then there is no room for development for an accounting department; no growth, no promotions. A pro is that outsourcing gives a financial manager the ability to focus on the bigger picture and see where changes can be made. If they are bogged down with little details, they might not be able to be the leader the hotel needs.
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The article discussions the pros and cons of whether a Hotel should out source their accounting to a third party. The author of this article strongly agrees that Hotels should not out source their accounting. The author finds it "unintelligent move". Many Hotel owners believe it's "trendy" and necessary to out source their accounting to keep up with their competitors. I agree with the author, that Hotel should do their accounting on site. Management would have better control over functions and departments such as; payroll, auditing, food and beverage management.